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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

More On Health Care and the Budget

As Ed Kilgore noted in a post last week, the White House has been dropping hints that the first Obama budget, which will be formally released on Thursday but will be a major topic of the President’s speech to Congress tomorrow, will at least lay the foundation for universal health care.
Jonathan Cohn at TNR has some more advance intelligence on the budget and health care, and is hearing that Obama will specifically identify only a portion of the funds needed in the long run to move towards universal health care:

Obama will restate his commitment to making health care available to everybody, to improving the quality of care, and to bringing its costs under control–in effect, reiterating the promises he’s made since he started running for president. He will also call for putting aside money in the budget for fulfilling that commitment–a sum, I’m told, that will be “significant” and enough to convince skeptics he’s serious about the endeavor.
Some of that money will represent savings from other government health programs. For example, Obama will propose that the government reduce the excessive payments it now gives to private insurers participating in the Medicare program. Another source of funds will be a financial contribution from medium- and large-employers who don’t provide employees with health insurance.
But even when all of this money is put together, it won’t be enough to pay the very high cost of universal coverage. Making coverage available to everybody involves, among other things, expanding programs like Medicaid and subsidizing the purchase of insurance for people who can’t afford it on their own.* And although Obama will aggressively pursue reforms designed to make medical care less expensive over time, it will be many years before those reforms can yield significant savings.
Here’s where things get interesting. Obama will say he’s determined to find that remaining sum, through offsetting revenue increases or spending cuts that will allow him to stay true to his pledge of fiscal responsibility. But Obama won’t be specifying the offsets in this budget overview. Instead, he’ll pledge to work with Congress on identifying them.

So: as Cohn goes on to say, how Obama frames this “down-payment on universal health care” in his speech tomorrow will be very important both politically and fiscally. You can expect Republicans to charge that he’s asking Americans to buy a pig in a poke. But more likely, what he’s trying to avoid is creating a big ripe immediate target for Republicans and industry opponents of his plan, while seeking to convince folks that universal health care is worth the cost, and the effort.

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